Nokia Shares Declined Despite Nvidia Partnership

Nokia shares fell by 5% last Thursday in Helsinki, reversing a two-day 40% rise following excitement over a new partnership with Nvidia.

The Finnish telecom equipment manufacturer announced a strategic partnership with Nvidia focused on AI-supported radio access networks (AI-RAN) and data center networks. As part of the agreement, Nvidia will invest approximately $1 billion in Nokia shares, which corresponds to about 2.9% of the current stock.

Nvidia also announced plans to build a fully American-made, AI-localized wireless stack for 6G. This platform will be built around the AI Aerial platform, which aims to enhance network efficiency compared to traditional radio access network systems.

This initiative will include 5G RAN software from ODC, user plane and core network functions from Cisco, and 6G applications developed by MITRE and Booz Allen.

Initially, investors viewed this partnership as a potential game-changer for Nokia's position in next-generation telecom infrastructure, though analysts cautioned against excessive optimism.

Kepler Cheuvreux stated that while the partnership "looks promising at first glance," the medium-term revenue potential remains uncertain due to a weak RAN market outlook over the next decade. They also assessed the possibility of new competitive disruptions like Nvidia.

Analysts warned that concrete benefits from this partnership may take time to materialize, emphasizing that the success of the collaboration will depend on how effectively Nokia can integrate Nvidia technology into commercial network solutions.